GBPUSD – Fresh Lows in View?

Cable has been the big loser today after Governor Carney dismissed any notion of hiking rates anytime in the foreseeable future.

Speaking at the Mansion House, Mr. Carney stated that, “From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular, anaemic wage growth, now is not yet the time to begin that adjustment.

In the coming months, I would like to see the extent to which weaker consumption growth is offset by other components of demand, whether wages begin to firm, and more generally, how the economy reacts to the prospect of tighter financial conditions and the reality of Brexit negotiations.”

In addition to the dovish news from BoE, cable was hit by news that PM May is having trouble negotiating with the ultra-right DUP party and if those talks stall, the prospect of a Tory government could be in doubt which is sure to propel pound even lower.

Technically the pair would make a symmetrical bottom at the 1.2500 level, which was the breakout point at the time Ms. May called the snap election. With political and monetary news turning ever more negative cable is headed that way.